German Solar Rate of Return 2006

By Paul Gipe

June 21, 2007 (Summer Solstice)

The following chart from New Energy’s 1/2007 issue (page 48) shows the profitability of solar PV installations in Germany in 2006. Though New Energy uses the term “profitability”, a more correct translation would be yield or rate of return in American English.

What is significant about this chart is that even with the high tariffs and the low installed costs, the rate of return remains marginal at solar yields typical of southern Germany, the sunny part of Germany, of 900 kWh/kW/year.

At current exchange rates, the €5,000/kW of installed cost is about $7,100 CAD/kW ($6,700 USD/kW) and €6,000/kW of installed cost is about $8,600 CAD/kW ($8,000 USD/kW). These costs are well below those currently in Canada and the USA.